I was curious about this as well so I did a little checking. When you attach a jpg there is a button after the name that says "create a link" and if you click that it posts the link in the body wherever you are at that point
Like this
then in your text you will see something like this "attachment 54461 RBG-LED.jpg" but with brackets around it. When posted (or previewed) that will show the image you uploaded.